Camden National Corporation Reports Second Quarter 2021 Financial Results

Rhea-AI Summary

Camden National Corporation (NASDAQ: CAC) reported impressive financial results for Q2 2021, with net income of $18.1 million and diluted EPS of $1.21, marking a 66% increase year-over-year. For the first six months, net income reached $37.9 million, a 55% increase. The company's return on average equity was 13.50%, reflecting solid performance despite an 8% decrease in net income compared to Q1 2021. The company declared a cash dividend of $0.36 per share, yielding 3.02%. Loan growth was 3%, with improved asset quality and a low non-performing asset ratio of 0.17%. Total assets increased to $5.2 billion.

Positive

• Net income increased by 66% year-over-year to $18.1 million.
• Diluted EPS rose by 66% to $1.21.
• Return on average equity of 13.50% for Q2 2021.
• Total assets increased by 5% to $5.2 billion since December 2020.
• Core deposits grew by 9%, driving total deposits to $4.3 billion.

Negative

• Net income and diluted EPS decreased by 8% from Q1 2021.
• Net interest margin declined to 2.83%, down 28 basis points year-over-year.
• Non-interest income decreased by 6%, primarily due to lower mortgage banking income.

CAMDEN, Maine, July 27, 2021 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $5.2 billion bank holding company headquartered in Camden, Maine, reported net income of $18.1 million and diluted earnings per share ("EPS") of $1.21 for the second quarter of 2021, an increase of 66% over the second quarter of 2020. Net income and diluted EPS for the six months ended June 30, 2021 was $37.9 million and $2.52, respectively, increases of 55% and 56% compared to the same period of 2020. These strong financial results led to a return on average equity of 13.50% and return on average tangible equity (non-GAAP) of 16.60% for the second quarter of 2021, and a return on average equity of 14.24% and return on average tangible equity (non-GAAP) of 17.52% for the six months ended June 30, 2021.

"We have had an excellent first half of the year with very strong financial results that included net income of $37.9 million and diluted EPS of $2.52, superior asset quality, and continued momentum on our various strategic initiatives, all while navigating the intricacies of the pandemic and its impact on our customers and employees," said Gregory A. Dufour, President and Chief Executive Officer. "We are optimistic about the future based on  vaccination rates, tourism and real estate activity within our markets. Our ongoing conversations with customers about economic recovery and growth further solidify this."

On a linked-quarter-basis, the Company's second quarter 2021 net income and diluted EPS each decreased 8% compared to the first quarter of 2021. This was driven by a shift in the Company's strategy in recent months to hold more of its residential mortgage loan production within its loan portfolio, which resulted in a decrease in mortgage banking income between periods.

In June 2021, the Company announced a cash dividend of $0.36 per share, payable on July 30, 2021, to shareholders of record on July 15, 2021, representing an annualized dividend yield of 3.02%, based on the Company's closing share price of $47.76, as reported by NASDAQ as of June 30, 2021.

"During the quarter, we welcomed Stephens, Inc. ('Stephens') to our group of stock analysts who provide research on our stock. With the addition of Stephens, we now have four stock analysts covering our stock," added Dufour.

SECOND QUARTER 2021 HIGHLIGHTS

• Net income increased by $7.2 million, or 66%, over the second quarter of 2020 and decreased $1.6 million, or 8%, compared to the first quarter of 2021.
• Net interest margin on a fully-taxable equivalent basis ("net interest margin") for the second quarter of 2021 was 2.83%, compared to 3.11% for the second quarter of 2020 and 2.88% for the first quarter of 2021.
• Adjusted net interest margin (non-GAAP), which excludes Small Business Administration Paycheck Protection Program ("SBA PPP") average loans and related income, and average excess liquidity and related income, for the second quarter of 2021 was 2.89%, compared to 3.15% for the second quarter of 2020 and 2.91% for the first quarter of 2021.
• Loans grew 3% during the second quarter of 2021 and 2% over this same period last year, excluding SBA PPP loans (non-GAAP).
• Non-performing assets were 0.17% of total assets and loans 30-89 days past due were 0.02% of total loans at June 30, 2021, compared to 0.22% and 0.10% at December 31, 2020, respectively.
• Book value per share grew 2% and tangible book value per share (non-GAAP) grew 3% during the second quarter of 2021 to $36.49 and $29.99 at June 30, 2021, respectively, and grew 8% and 10%, respectively, over the last 12 months.

FINANCIAL CONDITION

As of June 30, 2021, total assets were $5.2 billion, an increase of $253.3 million, or 5%, since December 31, 2020. Asset growth for the first half of 2021 was driven by an increase in investment balances of $282.9 million, or 25%, and loan balances of $66.1 million, or 2%. The Company continues to deploy excess liquidity and its primary means of doing so has been through investment and loan growth.

• Through the first half of 2021, the Company purchased $482.2 million of debt securities, which continue to be primarily mortgage-backed securities and collateralized mortgage obligations. As of June 30, 2021, the weighted-average life was 5.9 years compared to 5.1 years as of December 31, 2020.
• Loan growth for the first half of 2021 was centered within residential mortgages and commercial real estate which increased $66.1 million, or 6%, and $54.4 million, or 4%, respectively. In the first quarter of 2021, the Company shifted its position and began holding more of its residential mortgage production within its loan portfolio. Through the first six months of 2021, the Company held 46%, or $263.1 million, of its residential mortgage originations within its loan portfolio, which included holding 60% of its originations for the second quarter of 2021. As of June 30, 2021, the Company's residential mortgage pipeline was $214.2 million with 70% designated to be held in its portfolio.

As of June 30, 2021, total deposits were $4.3 billion, an increase of $288.9 million, or 7%, since December 31, 2020. Deposit growth for the first half of 2021 was due to core deposit (non-GAAP) growth of $313.0 million, or 9%, which was driven by another round of government stimulus programs in response to the COVID-19 pandemic during the first quarter of 2021 and the beginning of seasonal inflows, as business activity accelerates across the Company's markets during the summer months. Of note, the Company redesigned its consumer checking account products in the second quarter of 2021, which resulted in many accounts and balances transitioning from interest to non-interest checking.

As of June 30, 2021, total borrowings were $214.7 million, a decrease of $32.0 million, or 13%, since December 31, 2020. In light of its liquidity position, the Company terminated a $25.0 million long-term borrowing contract with the Federal Home Loan Bank of Boston ("FHLBB") during the first quarter of 2021. The long-term borrowing contract had an interest rate of 0.98%, and the Company incurred a one-time prepayment penalty of $514,000 for terminating the contract. Also, given the strength of the Company's liquidity and capital position, the Company redeemed in full its $15.0 million of outstanding subordinated notes that carried a 5.50% interest rate, at a redemption price equal to the principal amount of the notes plus accrued and unpaid interest, during the second quarter of 2021.

The Company's loan-to-deposit ratio was 77% at June 30, 2021, compared to 80% at December 31, 2020.

At June 30, 2021, the Company's capital position remained well in excess of regulatory requirements, including a total risk-based capital ratio of 15.26% and a tier 1 leverage ratio of 9.48%. The Company's shareholders' equity to total assets position and tangible common equity ratio (non-GAAP) was 10.59% and 8.87% at June 30, 2021, respectively, compared to 10.81% and 8.99% at December 31, 2020.

In the first quarter of 2021, the Company initiated a new share repurchase program for up to 750,000 shares of its common stock, or approximately 5% of the Company's shares outstanding. This share repurchase program replaces the program that terminated in January 2021. The Company did not repurchase any shares of its common stock during the first half of 2021.

ASSET QUALITY AND COVID-19 SHORT-TERM LOAN DEFERMENTS

As of June 30, 2021, the Company's asset quality metrics remained very strong and continued to improve, with non-performing assets of 0.17% of total assets and loans 30-89 days past due of 0.02% of total loans. In comparison, at December 31, 2020, non-performing assets were 0.22% of total assets, and loans 30-89 days past due were 0.10% of total loans.

In response to the COVID-19 pandemic, the Company offered temporary debt relief to its business and retail customers impacted by COVID-19 in 2020 in accordance with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and bank regulator guidance. The Company provided short-term debt payment relief to commercial and retail customers for periods up to 180 days, including full and partial principal and/or interest payment relief, and these loans were not individually assessed, designated or accounted for as troubled-debt restructurings. As of June 30, 2021, the Company had no loans operating under a short-term deferral arrangement,  compared to $26.5 million as of December 31, 2020 and $546.7 million as of June 30, 2020. The majority of these loans have returned to normal payment status or have since fully paid-off. Of those loans that were previously operating under a short-term deferral arrangement, $1.3 million were classified as non-accrual and $536,000 were 30-89 days past due as of June 30, 2021.

In late December 2020, another stimulus package was signed into law to provide additional COVID-19 relief for businesses and consumers. This stimulus package permits the Company the opportunity to again provide temporary debt relief to borrowers impacted by COVID-19. As of June 30, 2021, the Company had not provided any additional temporary debt relief to borrowers; however, such relief may be made in the future on a case-by-case basis.

ALLOWANCE FOR CREDIT LOSSES ("ACL")

In the fourth quarter of 2020, the Company adopted the current expected credit loss methodology, commonly referred to as "CECL," to account for the ACL on loans and certain off-balance credit exposures, effective as of January 1, 2020. Interim periods prior to the fourth quarter of 2020 continue to be presented under the incurred loss methodology.

At June 30, 2021, the ACL on loans was $32.1 million, or 0.98% of total loans, compared to $37.9 million, or 1.18% of total loans, at December 31, 2020. The decrease in the allowance reflects the Company's strong asset quality and overall improvement in the current and forecasted market conditions over its forecast period. There have been no significant changes in the Company's CECL methodology since year-end.

FINANCIAL OPERATING RESULTS (Q2 2021 vs. Q2 2020)

Net income for the second quarter of 2021 was $18.1 million, an increase of $7.2 million, or 66%, over the second quarter of 2020. Diluted EPS for the second quarter of 2021 was $1.21, an increase of $0.48, or 66%, over the second quarter of 2020.

Net Interest Income and Net Interest Margin.  Net interest income for the second quarter of 2021 was $33.5 million, a decrease of $1.0 million, or 3%, compared to the second quarter of 2020. Interest income decreased $2.9 million, or 7%, between periods, and was partially offset by a decrease in interest expense of $1.9 million, or 41%. The decrease in interest income between periods was driven by the change in the interest rate environment as the Company's average yield on interest-earning assets decreased 47 basis points to 3.06% for the second quarter of 2021. For the second quarter of 2021, the Company recognized $1.7 million of SBA PPP loan income, a decrease of $47,000 compared to the second quarter of 2020. Interest expense decreased $1.9 million between periods as interest rates fell and the Company's funding mix allocation shifted to lower cost deposits. The Company's cost of funds decreased 20 basis points between periods to 0.24% for the second quarter of 2021.

Net interest margin for the second quarter of 2021 was 2.83%, a decrease of 28 basis points compared to the second quarter of 2020. Adjusted net interest margin, which excludes SBA PPP loans and excess liquidity (non-GAAP), for the second quarter of 2021 was 2.89%, compared to 3.15% for the second quarter of 2020.

Provision for Credit Losses.  The provision for credit losses for the second quarter of 2021 was reported using the CECL methodology, whereas the provision for credit losses for the second quarter of 2020 was reported using the incurred loss methodology.

The change in provision for credit losses between periods is highlighted in the table below:

($ in thousands)		CECL Q2 2021				Incurred Q2 2020				Increase / (Decrease)
(Credit) provision for credit losses - loans		$	(3,452)			$	9,400			$	(12,852)
(Credit) provision for credit losses - off-balance sheet credit exposures		49				(2)				51
(Credit) provision for credit losses		$	(3,403)			$	9,398			$	(12,801)

For the second quarter of 2020, the Company recorded $9.4 million of provision expense to increase its allowance for credit losses on loans in response to the COVID-19 pandemic as it recognized the credit risks the pandemic created as "stay at home" orders were issued, non-essential businesses were temporarily closed and wide-spread layoffs occurred throughout its markets. A full 12-months later, the Company's asset quality remains very strong with total non-performing loans of $8.4 million, or 0.26% of total loans, as of June 30, 2021, annualized net charge-offs for the second quarter of 2021 of 0.03% of average loans, and improving macroeconomic factors over this period. As such, in the second quarter of 2021, the Company released $3.5 million of allowance for credit losses on loans.

Non-Interest Income.  Non-interest income for the second quarter of 2021 was $11.3 million, a decrease of $740,000, or 6%, over the second quarter of 2020. The decrease was driven by lower mortgage banking income of $2.1 million. In the first quarter of 2021, the Company shifted its strategy to hold more residential mortgage loans within its loan portfolio, and, as a result, the Company sold 40% of its residential mortgage production during the second quarter of 2021, compared to 65% for the second quarter of 2020. The decrease in mortgage banking income was partially offset by an increase in debit card income of $721,000 between periods. The increase in debit card income was driven by higher customer spending due to government stimulus provided in response to the COVID-19 pandemic.

Non-Interest Expense.  Non-interest expense for the second quarter of 2021 was $25.6 million, an increase of $2.1 million, or 9%, compared to the second quarter of 2020. The increase was driven by higher performance-based incentive accruals of $1.8 million. The second quarter of 2020 marked the first full calendar quarter of the COVID-19 pandemic, and performance-based incentive accruals were carried at lower levels given the level of risk and uncertainty at that time, in comparison to the current state of the economy and markets for the second quarter of 2021.

FINANCIAL OPERATING RESULTS (Q2 2021 vs. Q1 2021)

Net income for the second quarter of 2021 decreased $1.6 million, or 8%, compared to the first quarter of 2021. On a linked-quarter-basis, diluted EPS decreased $0.10, or 8%.

Net Interest Income and Net Interest Margin.  Net interest income for the second quarter of 2021 increased $1.2 million, or 4%, compared to the first quarter of 2021. Interest income increased $878,000, or 2%, between periods driven by increases in average investment balances of $179.6 million and loan balances of $9.3 million. SBA PPP loan income decreased $217,000, or 12%, compared to the first quarter of 2021. Interest expense decreased $287,000, or 9%, between periods as the cost of funds decreased 0.05% and average total borrowings decreased $8.6 million during between periods.

Net interest margin for the second quarter of 2021 decreased 5 basis points compared to the first quarter of 2021. Adjusted net interest margin, which excludes SBA PPP loans and excess liquidity (non-GAAP), for the second quarter of 2021 was 2.89%, compared to 2.91% for the first quarter of 2021.

Provision for Credit Losses.  The change in provision for credit losses between periods is highlighted in the table below:

($ in thousands)		CECL Q2 2021				CECL Q1 2021				Increase / (Decrease)
(Credit) for credit losses - loans		$	(3,452)			$	(1,854)			$	(1,598)
Provision (credit) for credit losses - off-balance sheet credit exposures		49				(102)				151
(Credit) for credit losses		$	(3,403)			$	(1,956)			$	(1,447)

Non-Interest Income.  Non-interest income for the second quarter of 2021 decreased $3.9 million, or 26%, compared to the first quarter of 2021. The decrease between periods was driven by lower mortgage banking income of $4.5 million as the Company sold 40% of its residential mortgage loan production during the second quarter of 2021, compared to 66% during the first quarter of 2021. The change in percentage sold reflects the Company's shift in strategy as it looks to hold more residential mortgages within its loan portfolio. The decrease in mortgage banking income was partially offset by an increase in debit card income of $376,000 between periods. The increase in debit card income was driven by higher customer spending due to government stimulus provided in response to the COVID-19 pandemic.

Non-Interest Expense.  Non-interest expense for the second quarter of 2021 increased $691,000, or 3%, compared to the first quarter of 2021. The increase was driven by an increase in compensation-related expenses of $796,000, or 5%, which was driven by annual merit increases that normally occur in March each year and an increase in incentive-based accruals of $374,000 based on year-to-date performance.

Q2 2021 CONFERENCE CALL

Camden National will host a conference call and webcast at 3:00 p.m., Eastern Time, on Tuesday, July 27, 2021 to discuss its second quarter 2021 financial results and outlook. Participants should dial in to the call 10 - 15 minutes before it begins. Information about the conference call is as follows:

Live dial-in (domestic):	(888) 349-0139
Live dial-in (international):	(412) 542-4154
Live webcast:	https://services.choruscall.com/links/cac210727.html

A link to the live webcast will be available on Camden National's website under "Investor Relations" at ww.CamdenNational.com prior to the meeting, and a replay of the webcast will be available on Camden National's website following the conference call. The transcript of the conference call will also be available on Camden National's website approximately two days after the conference call.

ABOUT CAMDEN NATIONAL CORPORATION

Camden National Corporation (NASDAQ:CAC) is the largest publicly traded bank holding company in Northern New England with $5.2 billion in assets and approximately 600 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 in Camden, Maine. Dedicated to customers at every stage of their financial journey, the bank offers the latest in digital banking, complemented by personalized service with 58 banking centers, 24/7 live phone support, 68 ATMs, and additional lending offices in New Hampshire and Massachusetts. For the past three years, Camden National Bank was named a Customer Experience (CX) Leader by leading independent research firm, Greenwich Associates. In 2020, it received awards in two CX categories: U.S. Retail Banking and U.S. Commercial Small Business. The Finance Authority of Maine has awarded Camden National Bank as "Lender at Work for Maine" for eleven years, and Camden National Corporation received a 2020 Raymond James Community Bankers Cup award, placing it in the top 10% of community banks. Comprehensive wealth management, investment and financial planning services are delivered by Camden National Wealth Management. To learn more, visit CamdenNational.com. Member FDIC.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including certain plans, expectations, goals, projections and other statements, which are subject to numerous risks, assumptions and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures; changes in the interest rate environment; changes in general economic conditions; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; legislative and regulatory changes that adversely affect the business in which Camden National is engaged; changes in the securities markets and other risks and uncertainties disclosed from time to time in Camden National's Annual Report on Form 10-K for the year ended December 31, 2020, as updated by other filings with the Securities and Exchange Commission ("SEC"). Further, statements about the potential effects of the COVID-19 pandemic on our business, results of operations and financial condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, action taken by government authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, service providers and on economies and markets more generally. Camden National does not have any obligation to update forward-looking statements.

USE OF NON-GAAP MEASURES

In addition to evaluating the Company's results of operations in accordance with generally accepted accounting principles in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as pre-tax, pre-provision earnings; return on average tangible equity; the efficiency and tangible common equity ratios; tangible book value per share; core deposits and average core deposits; adjusted yield on interest-earning assets and adjusted net interest margin (fully-taxable equivalent); and total loans, excluding SBA PPP loans. Management utilizes these non-GAAP financial measures for purposes of measuring our performance against our peer group and other financial institutions and analyzing our internal performance. We also believe these non-GAAP financial measure help investors better understand the Company's operating performance and trends and allow for better performance comparisons to other financial institutions. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions. Reconciliation to the comparable GAAP financial measure can be found in this document.

ANNUALIZED DATA

Certain returns, yields and performance ratios are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. Annualized data may not be indicative of any four-quarter period, and are presented for illustrative purposes only.

 

Selected Financial Data (unaudited)
		At or For The Three Months Ended												At or For The Six Months Ended
(In thousands, except number of shares and per share data)		June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Financial Condition Data
Investments		$	1,415,695			1,131,178				$	1,067,737			$	1,415,695			$	1,067,737
Loans and loans held for sale		3,301,056				3,259,275				3,362,631				3,301,056				3,362,631
Allowance for credit losses on loans		32,060				35,775				35,539				32,060				35,539
Total assets		5,152,069				5,089,279				4,959,016				5,152,069				4,959,016
Deposits		4,294,114				4,211,630				3,996,358				4,294,114				3,996,358
Borrowings		214,744				245,739				330,229				214,744				330,229
Shareholders' equity		545,548				532,120				506,467				545,548				506,467
Operating Data
Net interest income		$	33,529			$	32,364			$	34,539			$	65,893			$	66,365
(Credit) provision for credit losses		(3,403)				(1,956)				9,398				(5,359)				11,173
Non-interest income		11,320				15,215				12,060				26,535				23,463
Non-interest expense		25,590				24,899				23,509				50,489				48,070
Income before income tax expense		22,662				24,636				13,692				47,298				30,585
Income tax expense		4,519				4,896				2,752				9,415				6,152
Net income		$	18,143			$	19,740			$	10,940			$	37,883			$	24,433
Key Ratios
Return on average assets		1.42		%		1.62		%		0.90		%		1.52		%		1.05		%
Return on average equity		13.50		%		15.00		%		8.81		%		14.24		%		10.03		%
GAAP efficiency ratio		57.06		%		52.33		%		50.45		%		54.63		%		53.51		%
Net interest margin (fully-taxable equivalent)		2.83		%		2.88		%		3.11		%		2.85		%		3.10		%
Non-performing assets to total assets		0.17		%		0.20		%		0.23		%		0.17		%		0.23		%
Common equity ratio		10.59		%		10.46		%		10.21		%		10.59		%		10.21		%
Tier 1 leverage capital ratio		9.48		%		9.61		%		8.95		%		9.48		%		8.95		%
Total risk-based capital ratio		15.26		%		16.00		%		14.56		%		15.26		%		14.56		%
Per Share Data
Basic earnings per share		$	1.21			$	1.32			$	0.73			$	2.53			$	1.62
Diluted earnings per share		$	1.21			$	1.31			$	0.73			$	2.52			$	1.62
Cash dividends declared per share		$	0.36			$	0.36			$	0.33			$	0.72			$	0.66
Book value per share		$	36.49			$	35.64			$	33.85			$	36.49			$	33.85
Non-GAAP Measures(1)
Return on average tangible equity		16.60		%		18.47		%		11.09		%		17.52		%		12.68		%
Efficiency ratio		56.72		%		50.96		%		50.13		%		53.76		%		53.17		%
Adjusted net interest margin (fully-taxable equivalent)		2.89		%		2.91		%		3.15		%		2.90		%		3.11		%
Pre-tax, pre-provision earnings		$	19,259			$	22,680			$	23,090			$	41,939			$	41,758
Tangible common equity ratio		8.87		%		8.71		%		8.41		%		8.87		%		8.41		%
Tangible book value per share		$	29.99			$	29.12			$	27.31			$	29.99			$	27.31

(1)	Please see "Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)."

 

Consolidated Statements of Condition Data (unaudited)
(In thousands)		June 30, 2021				December 31, 2020				June 30, 2020
ASSETS
Cash, cash equivalents and restricted cash		$	103,733			$	145,774			$	155,828
Investments:
Trading securities		4,354				4,161				3,648
Available-for-sale securities, at fair value (book value of $1,381,864, $1,078,474 and $1,010,325, respectively)		1,399,823				1,115,813				1,047,663
Held-to-maturity securities, at amortized cost (fair value of $1,397, $1,411 and $1,388, respectively)		1,294				1,297				1,299
Other investments		10,224				11,541				15,127
Total investments		1,415,695				1,132,812				1,067,737
Loans held for sale, at fair value (book value of $14,887, $40,499 and $35,909, respectively)		15,140				41,557				36,590
Loans:
Commercial real estate		1,423,897				1,369,470				1,310,985
Commercial(1)		367,093				381,494				428,186
SBA PPP		126,064				135,095				218,803
Residential real estate		1,120,917				1,054,798				1,054,333
Consumer and home equity		247,945				278,965				313,734
Total loans		3,285,916				3,219,822				3,326,041
Less: allowance for credit losses on loans		(32,060)				(37,865)				(35,539)
Net loans		3,253,856				3,181,957				3,290,502
Goodwill and core deposit intangible assets		97,213				97,540				97,881
Other assets		266,432				299,105				310,478
Total assets		$	5,152,069			$	4,898,745			$	4,959,016
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non-interest checking		$	1,183,403			$	792,550			$	712,146
Interest checking		1,138,273				1,288,575				1,349,456
Savings and money market		1,355,316				1,282,886				1,278,603
Certificates of deposit		334,336				357,666				431,376
Brokered deposits		282,786				283,567				224,777
Total deposits		4,294,114				4,005,244				3,996,358
Short-term borrowings		170,413				162,439				245,998
Long-term borrowings		—				25,000				25,000
Subordinated debentures		44,331				59,331				59,231
Accrued interest and other liabilities		97,663				117,417				125,962
Total liabilities		4,606,521				4,369,431				4,452,549
Shareholders' equity		545,548				529,314				506,467
Total liabilities and shareholders' equity		$	5,152,069			$	4,898,745			$	4,959,016

(1)	Includes the Healthcare Professional Funding Corporation ("HPFC") loan portfolio.

 

Consolidated Statements of Income Data (unaudited)
		For The Three Months Ended												For The Six Months Ended
(In thousands, except per share data)		June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Interest Income
Interest and fees on loans		$	30,865			$	30,560			$	33,120			$	61,425			$	67,165
Taxable interest on investments		4,376				3,829				4,883				8,205				9,761
Nontaxable interest on investments		763				728				828				1,491				1,615
Dividend income		102				105				167				207				335
Other interest income		160				166				180				326				515
Total interest income		36,266				35,388				39,178				71,654				79,391
Interest Expense
Interest on deposits		1,921				2,063				3,392				3,984				10,054
Interest on borrowings		176				156				359				332				1,197
Interest on subordinated debentures		640				805				888				1,445				1,775
Total interest expense		2,737				3,024				4,639				5,761				13,026
Net interest income		33,529				32,364				34,539				65,893				66,365
(Credit) provision for credit losses(1)		(3,403)				(1,956)				9,398				(5,359)				11,173
Net interest income after (credit) provision for credit losses		36,932				34,320				25,141				71,252				55,192
Non-Interest Income
Mortgage banking income, net		2,598				7,109				4,691				9,707				8,225
Debit card income		3,112				2,736				2,391				5,848				4,532
Income from fiduciary services		1,707				1,526				1,603				3,233				3,105
Service charges on deposit accounts		1,517				1,539				1,337				3,056				3,349
Brokerage and insurance commissions		939				953				622				1,892				1,279
Bank-owned life insurance		591				594				614				1,185				1,303
Customer loan swap fees		—				—				57				—				171
Other income		856				758				745				1,614				1,499
Total non-interest income		11,320				15,215				12,060				26,535				23,463
Non-Interest Expense
Salaries and employee benefits		15,318				14,522				13,627				29,840				27,954
Furniture, equipment and data processing		2,947				3,027				2,710				5,974				5,500
Net occupancy costs		1,805				1,951				1,997				3,756				4,000
Debit card expense		1,074				986				878				2,060				1,812
Consulting and professional fees		997				863				1,181				1,860				1,964
Regulatory assessments		487				503				299				990				461
Amortization of core deposit intangible assets		164				164				171				328				341
Other real estate owned and collection (recoveries) costs, net		(25)				(191)				98				(216)				199
Other expenses		2,823				3,074				2,548				5,897				5,839
Total non-interest expense		25,590				24,899				23,509				50,489				48,070
Income before income tax expense		22,662				24,636				13,692				47,298				30,585
Income Tax Expense		4,519				4,896				2,752				9,415				6,152
Net Income		$	18,143			$	19,740			$	10,940			$	37,883			$	24,433
Per Share Data
Basic earnings per share		$	1.21			$	1.32			$	0.73			$	2.53			$	1.62
Diluted earnings per share		$	1.21			$	1.31			$	0.73			$	2.52			$	1.62

(1)	Reported balances for the three months ended June 30 and March 31, 2021, and the six months ended June 30, 2021, have been accounted for under the CECL model. Reported balances for the three and six months ended June 30, 2020 have been accounted for under the incurred loss method.

 

Quarterly Average Balance and Yield/Rate Analysis (unaudited)
		Average Balance												Yield/Rate
		For The Three Months Ended												For The Three Months Ended
(Dollars in thousands)		June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021			March 31, 2021			June 30, 2020
Assets
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets		$	235,676			$	210,844			$	168,221			0.09	%		0.09	%		0.06	%
Investments - taxable		1,129,682				946,456				836,885				1.62	%		1.71	%		2.49	%
Investments - nontaxable(1)		114,811				118,469				124,101				3.36	%		3.11	%		3.38	%
Loans(2):
Commercial real estate		1,407,374				1,382,795				1,302,393				3.60	%		3.58	%		3.83	%
Commercial(1)		319,100				333,458				404,545				3.78	%		3.74	%		3.78	%
SBA PPP		158,258				154,900				178,119				4.15	%		4.85	%		3.79	%
Municipal(1)		26,137				24,133				19,567				3.26	%		3.33	%		3.62	%
HPFC		10,775				12,549				17,659				9.89	%		7.18	%		9.28	%
Residential real estate		1,093,502				1,083,101				1,084,931				3.77	%		3.72	%		4.06	%
Consumer and home equity		253,825				268,711				321,019				4.17	%		4.17	%		4.29	%
Total loans		3,268,971				3,259,647				3,328,233				3.76	%		3.76	%		3.97	%
Total interest-earning assets		4,749,140				4,535,416				4,457,440				3.06	%		3.15	%		3.53	%
Other assets		381,677				401,973				414,225
Total assets		$	5,130,817			$	4,937,389			$	4,871,665
Liabilities & Shareholders' Equity
Deposits:
Non-interest checking		$	970,446			$	817,631			$	664,605			—	%		—	%		—	%
Interest checking		1,311,400				1,289,511				1,298,468				0.18	%		0.19	%		0.28	%
Savings		659,892				626,591				518,803				0.04	%		0.04	%		0.06	%
Money market		703,780				685,026				717,056				0.29	%		0.31	%		0.37	%
Certificates of deposit		338,595				351,555				477,068				0.53	%		0.63	%		1.34	%
Total deposits		3,984,113				3,770,314				3,676,000				0.16	%		0.19	%		0.35	%
Borrowings:
Brokered deposits		284,194				284,620				234,823				0.44	%		0.45	%		0.28	%
Customer repurchase agreements		184,663				165,721				209,302				0.38	%		0.29	%		0.56	%
Subordinated debentures		46,639				59,331				59,194				5.50	%		5.50	%		6.03	%
Other borrowings		—				14,444				76,983				—	%		0.99	%		0.35	%
Total borrowings		515,496				524,116				580,302				0.88	%		0.99	%		0.98	%
Total funding liabilities		4,499,609				4,294,430				4,256,302				0.24	%		0.29	%		0.44	%
Other liabilities		92,261				109,314				115,914
Shareholders' equity		538,947				533,645				499,449
Total liabilities & shareholders' equity		$	5,130,817			$	4,937,389			$	4,871,665
Net interest rate spread (fully-taxable equivalent)														2.82	%		2.86	%		3.09	%
Net interest margin (fully-taxable equivalent)														2.83	%		2.88	%		3.11	%
Adjusted net interest margin (fully-taxable equivalent) (non-GAAP)														2.89	%		2.91	%		3.15	%

(1)	Reported on a tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans.
(2)	Non-accrual loans and loans held for sale are included in total average loans.

 

Year-to-Date Average Balance and Yield/Rate Analysis (unaudited)
		Average Balance								Yield/Rate
		For The Six Months Ended								For The Six Months Ended
(Dollars in thousands)		June 30, 2021				June 30, 2020				June 30, 2021			June 30, 2020
Assets
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets		$	223,329			$	117,201			0.09	%		0.39	%
Investments - taxable		1,038,575				822,963				1.66	%		2.52	%
Investments - nontaxable(1)		116,630				120,819				3.24	%		3.38	%
Loans(2):
Commercial real estate		1,395,152				1,287,965				3.59	%		4.03	%
Commercial(1)		326,240				410,563				3.76	%		4.00	%
SBA PPP		156,588				89,033				4.49	%		3.79	%
Municipal(1)		25,141				18,279				3.29	%		3.64	%
HPFC		11,657				18,997				8.44	%		8.50	%
Residential real estate		1,088,330				1,081,884				3.75	%		4.12	%
Consumer and home equity		261,227				327,895				4.17	%		4.66	%
Total loans		3,264,335				3,234,616				3.76	%		4.14	%
Total interest-earning assets		4,642,869				4,295,599				3.10	%		3.71	%
Other assets		391,768				384,330
Total assets		$	5,034,637			$	4,679,929
Liabilities & Shareholders' Equity
Deposits:
Non-interest checking		$	894,460			$	597,053			—	%		—	%
Interest checking		1,300,516				1,222,626				0.19	%		0.48	%
Savings		643,333				497,826				0.04	%		0.07	%
Money market		694,455				683,720				0.30	%		0.66	%
Certificates of deposit		345,039				514,573				0.58	%		1.48	%
Total deposits		3,877,803				3,515,798				0.17	%		0.52	%
Borrowings:
Brokered deposits		284,406				221,454				0.44	%		0.87	%
Customer repurchase agreements		175,245				222,827				0.34	%		0.83	%
Subordinated debentures		52,950				59,157				5.50	%		6.03	%
Other borrowings		7,182				68,120				0.99	%		0.80	%
Total borrowings		519,783				571,558				0.93	%		1.38	%
Total funding liabilities		4,397,586				4,087,356				0.26	%		0.64	%
Other liabilities		100,740				102,762
Shareholders' equity		536,311				489,811
Total liabilities & shareholders' equity		$	5,034,637			$	4,679,929
Net interest rate spread (fully-taxable equivalent)										2.84	%		3.07	%
Net interest margin (fully-taxable equivalent)										2.85	%		3.10	%
Adjusted net interest margin (fully-taxable equivalent) (non-GAAP)										2.90	%		3.11	%

(1)	Reported on a tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans.
(2)	Non-accrual loans and loans held for sale are included in total average loans.

 

Asset Quality Data
(unaudited)
(In thousands)		At or For The Six Months Ended June 30, 2021				At or For The Three Months Ended March 31, 2021				At or For The Year Ended December 31, 2020(1)				At or For The Nine Months Ended September 30, 2020				At or For The Six Months Ended June 30, 2020
Non-accrual loans:
Residential real estate		$	2,725			$	3,637			$	3,477			$	4,017			$	4,664
Commercial real estate		222				309				512				565				432
Commercial(1)		1,511				1,737				1,607				1,114				1,091
Consumer and home equity		1,424				1,897				2,000				2,503				2,371
Total non-accrual loans		5,882				7,580				7,596				8,199				8,558
Accruing troubled-debt restructured loans not included above		2,519				2,579				2,818				2,952				2,874
Total non-performing loans		8,401				10,159				10,414				11,151				11,432
Other real estate owned		165				204				236				—				118
Total non-performing assets		$	8,566			$	10,363			$	10,650			$	11,151			$	11,550
Loans 30-89 days past due:
Residential real estate		$	303			$	772			$	2,297			$	1,784			$	4,016
Commercial real estate		99				177				50				2,056				1,625
Commercial(2)		183				425				430				1,638				223
Consumer and home equity		214				264				440				434				388
Total loans 30-89 days past due		$	799			$	1,638			$	3,217			$	5,912			$	6,252
ACL on loans at the beginning of the period		$	37,865			$	37,865			$	25,171			$	25,171			$	25,171
Impact of CECL adoption		—				—				233				—				—
(Credit) provision for loan losses		(5,306)				(1,854)				13,215				12,172				11,172
Charge-offs:
Residential real estate		88				53				121				121				96
Commercial real estate		—				—				103				104				71
Commercial(1)		406				147				1,130				857				673
Consumer and home equity		213				87				484				199				134
Total charge-offs		707				287				1,838				1,281				974
Total recoveries		(208)				(51)				(1,084)				(352)				(170)
Net charge-offs		499				236				754				929				804
ACL on loans at the end of the period		$	32,060			$	35,775			$	37,865			$	36,414			$	35,539
Components of ACL:
ACL on loans		$	32,060			$	35,775			$	37,865			$	36,414			$	35,539
ACL on off-balance sheet credit exposures(3)		2,515				2,466				2,568				9				22
ACL, end of period		$	34,575			$	38,241			$	40,433			$	36,423			$	35,561
Ratios:
Non-performing loans to total loans		0.26		%		0.31		%		0.32		%		0.34		%		0.34		%
Non-performing assets to total assets		0.17		%		0.20		%		0.22		%		0.22		%		0.23		%
ACL on loans to total loans		0.98		%		1.11		%		1.18		%		1.11		%		1.07		%
Net charge-offs (recoveries) to average loans (annualized):
Quarter-to-date		0.03		%		0.03		%		(0.02)		%		0.01		%		0.05		%
Year-to-date		0.03		%		0.03		%		0.02		%		0.04		%		0.05		%
ACL on loans to non-performing loans		381.62		%		352.15		%		363.60		%		326.55		%		310.87		%
Loans 30-89 days past due to total loans		0.02		%		0.05		%		0.10		%		0.18		%		0.19		%

(1)	Period ended December 31, 2020, includes a $3.3 million increase upon adoption of CECL. Prior interim periods were not restated for CECL.
(2)	Includes the HPFC loan portfolio.
(3)	Presented within accrued interest and other liabilities on the consolidated statements of condition.

 

Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)
Return on Average Tangible Equity:
		For the Three Months Ended												For the Six Months Ended
(Dollars in thousands)		June 30, 2021				March 31, 2021				June 30, 2020				June 30,  2021				June 30,  2020
Net income, as presented		$	18,143			$	19,740			$	10,940			$	37,883			$	24,433
Add: amortization of core deposit intangible assets, net of tax(1)		130				130				135				259				269
Net income, adjusted for amortization of core deposit intangible assets		$	18,273			$	19,870			$	11,075			$	38,142			$	24,702
Average equity, as presented		$	538,947			$	533,645			$	499,449			$	536,311			$	489,811
Less: average goodwill and core deposit intangible assets		(97,292)				(97,463)				(97,965)				(97,377)				(98,054)
Average tangible equity		$	441,655			$	436,182			$	401,484			$	438,934			$	391,757
Return on average equity		13.50		%		15.00		%		8.81		%		14.24		%		10.03		%
Return on average tangible equity		16.60		%		18.47		%		11.09		%		17.52		%		12.68		%
(1) Assumed a 21% tax rate.
Efficiency Ratio:
		For the Three Months Ended												For the Six Months Ended
(Dollars in thousands)		June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Non-interest expense, as presented		$	25,590			$	24,899			$	23,509			$	50,489			$	48,070
Less: prepayment penalty on borrowings		—				(514)				—				(514)				—
Adjusted non-interest expense		$	25,590			$	24,385			$	23,509			$	49,975			$	48,070
Net interest income, as presented		$	33,529			$	32,364			$	34,539			$	65,893			$	66,365
Add: effect of tax-exempt income(1)		265				271				295				536				574
Non-interest income, as presented		11,320				15,215				12,060				26,535				23,463
Adjusted net interest income plus non-interest income		$	45,114			$	47,850			$	46,894			$	92,964			$	90,402
GAAP efficiency ratio		57.06		%		52.33		%		50.45		%		54.63		%		53.51		%
Non-GAAP efficiency ratio		56.72		%		50.96		%		50.13		%		53.76		%		53.17		%
(1) Assumed a 21% tax rate.
Pre-tax, Pre-provision Earnings:
		For the Three Months Ended												For the Six Months Ended
(In thousands)		June 30, 2021				March 31, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Net income, as presented		$	18,143			$	19,740			$	10,940			$	37,883			$	24,433
Add: (credit) provision for credit losses		(3,403)				(1,956)				9,398				(5,359)				11,173
Add: income tax expense		4,519				4,896				2,752				9,415				6,152
Pre-tax, pre-provision earnings		$	19,259			$	22,680			$	23,090			$	41,939			$	41,758
Adjusted Yield on Interest-Earning Assets:
							For the Three Months Ended									For the Six Months Ended
							June 30, 2021			March 31, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Yield on interest-earning assets, as presented							3.06	%		3.15	%		3.53	%		3.10	%		3.71	%
Add: effect of excess liquidity on yield on interest-earning assets							0.12	%		0.10	%		0.08	%		0.11	%		0.04	%
Less: effect of SBA PPP loans on yield on interest-earning assets							(0.04)	%		(0.06)	%		(0.02)	%		(0.05)	%		(0.01)	%
Adjusted yield on interest-earning assets							3.14	%		3.19	%		3.59	%		3.16	%		3.74	%
Adjusted Net Interest Margin (Fully-Taxable Equivalent):
							For the Three Months Ended									For the Six Months Ended
							June 30, 2021			March 31, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Net interest margin (fully-taxable equivalent), as presented							2.83	%		2.88	%		3.11	%		2.85	%		3.10	%
Add: effect of excess liquidity on net interest margin (fully-taxable equivalent)							0.11	%		0.10	%		0.07	%		0.10	%		0.03	%
Less: effect of SBA PPP loans on net interest margin (fully-taxable equivalent)							(0.05)	%		(0.07)	%		(0.03)	%		(0.05)	%		(0.02)	%
Adjusted net interest margin (fully-taxable equivalent)							2.89	%		2.91	%		3.15	%		2.90	%		3.11	%
Tangible Book Value Per Share and Tangible Common Equity Ratio:
										June 30, 2021				March 31, 2021				June 30, 2020
(In thousands, except number of shares, per share data and ratios)
Tangible Book Value Per Share:
Shareholders' equity, as presented										$	545,548			$	532,120			$	506,467
Less: goodwill and other intangible assets										(97,213)				(97,377)				(97,881)
Tangible shareholders' equity										$	448,335			$	434,743			$	408,586
Shares outstanding at period end										14,951,067				14,928,434				14,963,041
Book value per share										$	36.49			$	35.64			$	33.85
Tangible book value per share										$	29.99			$	29.12			$	27.31
Tangible Common Equity Ratio:
Total assets										$	5,152,069			$	5,089,279			$	4,959,016
Less: goodwill and other intangible assets										(97,213)				(97,377)				(97,881)
Tangible assets										$	5,054,856			$	4,991,902			$	4,861,135
Common equity ratio										10.59		%		10.46		%		10.21		%
Tangible common equity ratio										8.87		%		8.71		%		8.41		%
Core Deposits:
(In thousands)										June 30, 2021				March 31,  2021				June 30, 2020
Total deposits										$	4,294,114			$	4,211,630			$	3,996,358
Less: certificates of deposit										(334,336)				(346,046)				(431,376)
Less: brokered deposits										(282,786)				(288,758)				(224,777)
Core deposits										$	3,676,992			$	3,576,826			$	3,340,205
Average Core Deposits:
		For the Three Months Ended												For the Six Months Ended
(In thousands)		June 30, 2021				March 31,  2021				June 30, 2020				June 30, 2021				June 30, 2020
Total average deposits		$	3,984,113			$	3,770,314			$	3,676,000			$	3,877,803			$	3,515,798
Less: average certificates of deposit		(338,595)				(351,555)				(477,068)				(345,039)				(514,573)
Average core deposits		$	3,645,518			$	3,418,759			$	3,198,932			$	3,532,764			$	3,001,225
Total loans, excluding SBA PPP loans:
(In thousands)										June 30, 2021				March 31, 2021				June 30, 2020
Total loans, as presented										$	3,285,916			$	3,237,046			$	3,326,041
Less: SBA PPP loans										(126,064)				(169,407)				(218,803)
Total loans, excluding SBA PPP loans										$	3,159,852			$	3,067,639			$	3,107,238

 

 

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SOURCE Camden National Corporation

FAQ

What were Camden National's earnings for Q2 2021?

Camden National reported net income of $18.1 million and diluted EPS of $1.21 for Q2 2021.

How did Camden National's financial performance compare to Q1 2021?

Net income and diluted EPS decreased by 8% compared to Q1 2021.

What is Camden National's dividend yield?

Camden National declared a cash dividend of $0.36 per share, representing an annualized dividend yield of 3.02%.

What were the total assets of Camden National as of June 30, 2021?

As of June 30, 2021, Camden National's total assets were $5.2 billion.

How much did Camden National's loans grow in Q2 2021?

Loans grew by 3% during the second quarter of 2021.